Fiat Chrysler saviour Marchionne dies

Car industry giant Sergio Marchionne has passed away in a Zurich hospital from complications following surgery on his shoulder.

The long-standing CEO was being treated for a malignant tumour in his shoulder, related to a prostate cancer, when he suffered an embolism.

The 66-year-old fell into a coma on Saturday, surviving on life support, with doctors declaring he would never recover his brain function.

"Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone," FCA Chairman and the Agnelli family’s business leader, John Elkann, said.

He praised Marchionne for his "values of humanity, responsibility and open-mindedness. My family and I will always be grateful for what he has done."

With degrees in philosophy, law and finance, Marchionne is credited with saving Fiat in the dark days of 2003, first through a cleverly worded put option that forced GM to pay it $US2 billion for not taking over the Italian company, then through a series of clever value-maximising deals.

Fiat returned the brink in the global financial crisis, before Marchionne again masterminded a way through, then took over America’s third-largest car-maker, Chrysler, in a 2009 deal that required no cash whatsoever from Fiat.

He listed the Case New Holland tractor operation in 2011 and did the same with Ferrari in 2016 and finally cleared Fiat Chrysler Automobiles of its $US13 billion debt pile earlier this year.

Marchionne had planned to step down as FCA CEO next year and from his dual roles as Ferrari Chairman and CEO in 2020, but his health crisis accelerated the timing of his succession plan.

His CEO role at FCA was taken by Jeep boss, Mike Manley, 54, on Saturday, while John Elkann retained the listed company’s chairmanship.

His role as CEO of Ferrari was taken by Ferrari board member and ex-Philip Morris CEO, Louis Camilleri, on Saturday, while John Elkann became chairman of the sports car company.

Shares in FCA fell five per cent on Monday on the news of Marchionne’s crisis, while a once-favoured CEO candidate, FCA Europe boss Alfredo Altavilla, resigned after being overlooked.

A frighteningly hard worker, the Canadian-Italian would regularly push himself to 18- and 20-hour days and expected the same from those around him. He was a chain smoker and espresso addict until about a year ago when he gave up both vices, though it appeared to have been a sacrifice too late.

He was known publicly as the world’s premier black-jumper enthusiast and eschewed ties, regardless of the importance of any occasion.

The son of an Italian federal policeman (Carabinieri), Marchionne emigrated with his family to Canada when he was 14 and was fluent in English, Italian and French.

Marchionne's last public appearance was on June 26, when he presented the Carabinieri with a Jeep Wranger. He appeared exhausted and unusually out of breath and he was in a Swiss hospital just days later.

Oddly for an automotive CEO, he will be remembered far more for his financial and deal-making wizardry, rather than any brilliant cars that may have been developed.

Lancia withered on the vine under his leadership, contracting to just one model only sold in Italy.

He pushed Maserati into higher volume targets and its production was mostly rolled into FCA’s own system, but the Trident brand has yet to realise its potential.

He unveiled a grand plan five-year plan in 2014 to turn Alfa Romeo into a contender to fight BMW, Mercedes-Benz and Audi, with approval for an all-new rear- and all-wheel drive architecture for the Giulia and the Stelvio crossover.

He recently revealed FCA’s new five-year plan, complete with a full timeline for new models, yet its previous five-year plan remained largely unfulfilled.

FCA’s income remains disproportionately dependent on the US -- in particular, cashflow from Jeep and RAM (the pick-up brand spun off from Dodge) -- and there were no successful forays into the booming Chinese market to act as a shock absorber for a crisis or a foundation for growth.

The Fiat brand, built around small cars like the Panda and B-segment cars like the Punto and Bravo, particularly struggled, with falling profitability, a failed assault on the US market and Marchionne’s refusal to allow new architectures to be developed to improve its competitiveness.

The scenario was common to Turin and Michigan, with the engineering developers rarely winning with new projects and Fiat Centro Stile, FCA’s Turin design house, left with little to do.

Chrysler fared even worse, with a massive passenger car commitment cancelled and the brand now mainly survives on people-movers.

With the EU’s 2022 emissions laws demanding electrification, FCA remains poorly positioned with no EV commitments, no serious hybrids on its books and no fuel-cell development program.